Five years ago, as part of a plan to encourage citizens of Levaska to increase the amount of money they...
GMAT Critical Reasoning : (CR) Questions
Five years ago, as part of a plan to encourage citizens of Levaska to increase the amount of money they put into savings, Levaska's government introduced special savings accounts in which up to \(\$3,000\) a year can be saved with no tax due on the interest unless money is withdrawn before the account holder reaches the age of sixty-five. Millions of dollars have accumulated in the special accounts, so the government's plan is obviously working.
Which of the following, if true, most seriously weakens the argument?
Passage Analysis:
| Text from Passage | Analysis |
| Five years ago, as part of a plan to encourage citizens of Levaska to increase the amount of money they put into savings, Levaska's government introduced special savings accounts in which up to $3,000 a year can be saved with no tax due on the interest unless money is withdrawn before the account holder reaches the age of sixty-five. |
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| Millions of dollars have accumulated in the special accounts, so the government's plan is obviously working. |
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Argument Flow:
The argument moves from describing the government's savings plan with its specific rules to pointing out that millions have accumulated in these accounts, then concludes this proves the plan worked.
Main Conclusion:
The government's plan to encourage citizens to save more money is obviously working.
Logical Structure:
The author uses the fact that millions of dollars have accumulated in the special accounts as direct evidence that the plan successfully encouraged people to save more money. This assumes that money in the accounts equals increased overall savings behavior.
Prethinking:
Question type:
Weaken - We need to find information that reduces belief in the conclusion that the government's plan is working
Precision of Claims
The conclusion claims the plan is 'obviously working' based on 'millions of dollars accumulated.' We need to be precise about what 'working' means - does it mean increasing total savings or just moving existing savings around?
Strategy
The author concludes the savings plan is working simply because millions accumulated in these special accounts. But this reasoning has a gap - just because money went into these accounts doesn't mean people are saving MORE overall. We need scenarios that show the money accumulation doesn't prove the plan's actual goal (increasing total savings) was achieved.
A substantial number of Levaskans have withdrawn at least some of the money they had invested in the special accounts.
This suggests some people withdrew money from the accounts, but this doesn't necessarily weaken the argument. The author's evidence is that 'millions of dollars have accumulated' - even with some withdrawals, the net accumulation could still support the conclusion that the plan is working. This doesn't address the core flaw in the reasoning.
Workers in Levaska who already save money in long-term tax-free accounts that are offered through their workplace cannot take advantage of the special savings accounts introduced by the government.
This explains why certain workers can't use the special accounts, but it doesn't weaken the argument about whether the plan is working. The fact that some people are excluded doesn't undermine the evidence that millions have accumulated or challenge whether this proves increased savings behavior.
The rate at which interest earned on money deposited in regular savings accounts is taxed depends on the income bracket of the account holder.
Information about how regular savings account interest is taxed based on income brackets is irrelevant to whether the government's special savings plan is working. This doesn't connect to the argument's logic or evidence at all.
Many Levaskans who already had long-term savings have steadily been transferring those savings into the special accounts.
This directly attacks the argument's core assumption. The author concludes the plan is working because millions accumulated in the special accounts, assuming this means people are saving MORE overall. But if people are just transferring existing long-term savings into these accounts, then the accumulation doesn't prove the plan achieved its goal of increasing total savings. The money was already being saved - it just moved locations. This completely undermines the conclusion.
Many of the economists who now claim that the government's plan has been successful criticized it when it was introduced.
The fact that economists who now praise the plan initially criticized it is irrelevant to whether the plan is actually working. This is about changing opinions, not about the effectiveness of the plan itself. Past criticism doesn't weaken current evidence of success.